Court Sides With NCCI, OIR in Workers’ Compensation Rate Dispute
Florida’s First District Court of Appeal reversed a Leon County circuit judge’s order in its entirety and sided with the National Council on Compensation Insurance (NCCI) and the Florida Office of Insurance Regulation (OIR) in upholding a 14.5% workers’ compensation rate increase.
NCCI submitted rate filings to OIR responding to Florida Supreme Court decisions invalidating portions of Florida’s workers’ compensation statutes. Although NCCI initially filed for rate increases totaling 19.6%, the OIR approved a 14.5% rate increase after its own review and a public hearing. An attorney who purchases workers’ compensation insurance for his firm challenged the rate increase and argued it is void because NCCI and/or OIR violated Florida’s open government laws in developing the proposed rates and in failing to provide certain data. A Leon County circuit judge agreed and found that the parties violated several provisions of the open government statutes.
The First District Court of Appeal rejected all aspects of the attorney’s arguments and the circuit judge’s order. The First DCA determined that NCCI developed its proposed rates through a single actuary and not a committee, which would have been subject to open meeting requirements. Although the circuit judge suggested NCCI’s ratemaking process might have been designed to circumvent the open meeting requirement, the First DCA found this unlikely considering that NCCI uses the same process in more than 40 states.
The First DCA also rejected an argument that OIR delegated workers’ compensation ratemaking to NCCI, which then rendered NCCI an agency subject to open government laws. The First DCA found that NCCI is responsible for developing and filing proposed rates, and the OIR is responsible for reviewing and either approving or disapproving the rates. Neither party has delegated these responsibilities to the other.
Although the circuit court further asserted that NCCI was obligated to turn over certain ratemaking data to the attorney as an aggrieved party, the First DCA disagreed with this conclusion. The First DCA found that the statute invoked by the attorney applies to insureds who are “affected” by a rate. The attorney asked for data relating to NCCI’s initial 19.6% rate increase, which the OIR did not approve. The attorney therefore was not affected by the 19.6% increase and was not entitled to the data underlying that request.
The case has been remanded to the circuit court for entry of an order approving the 14.5% increase in workers’ compensation rates.